The Goods and Services Tax (GST) Council, which will meet in Lucknow on Friday, is likely to discuss bringing petrol, diesel and other petroleum products under its ambit. If the proposal is accepted, it will lead to a drastic reduction in central and state levies on petrol and diesel and bring down consumer prices of automobile fuels substantially. According to a report by Hindustan Times’ sister publication Livehindustan, this may bring petrol price to ₹75 per litre, and diesel to ₹68 per litre.
The matter will be brought before the council for discussion and decision on September 17 as per the direction of the Kerala high court that had in June issued directions to decide on including petrol and diesel under the ambit of GST, two people aware of the development said, as reported by Livehindustan.
At present, petrol is sold at ₹101.19 per litre and diesel at ₹88.62 in Delhi. In the national capital, central levies account for over 32% of petrol’s price, and state taxes (value-added tax or VAT) 23.07%. On diesel, central excise is over 35% while state taxes are more than 14%.
Through 2020, as global crude prices fell, the central government raised excise duty on fuel to shore up its finances. States too followed suit as revenues were hit on account of the pandemic. According to official data, the petroleum sector contributed ₹3,71,726 crore central excise revenue in 2020-21, and ₹2,02,937 crore state levies or value-added tax (VAT).
It is represented by state finance ministers and its decisions are often unanimous.